It has been coming for a while. Stock markets have been operating on the basis that the disruption to energy supplies in the Gulf was temporary – troubling but likely to pass. Nine days ago, JP Morgan, the big US investment bank, did something unusual. Its oil analysts admitted that for the first time since the Iran conflict started, they didn’t have a view on how it would end. “We simply don’t know how to model the endgame.”

As the bankers wrote, the markets have been working on the view that something would be worked out but “the assumption that the disruption is temporary is increasingly difficult to sustain”.

Then this week something important changed in the markets. The view started to spread that, as JP Morgan had said, the Gulf crisis may just linger on. And the inflationary consequences may not just fizzle out. Markets go up and down and are often best ignored. But what happened this week is worthy of note.

The key indicator is what big investors have called “the most important price in the world” – the cost the US government has to pay to raise new debt. It is the benchmark for interest rates across the world, vital for investors, currency markets, the world’s biggest economy and indebted governments worldwide. On the back of fears of further inflation, the interest rate on US government 10-year debt – “treasures”, in the jargon – has smashed through the 5 per cent barrier and reached 5.2 per cent this week, its highest level since 2007.

How a budget is made: Warnings, pitches, bilaterals and the ‘end of the world memo’

Fuel protesters meet Simon Harris after........

© The Irish Times